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EXHIBIT 10-9
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GUARANTY
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This GUARANTY (this "GUARANTY") is made this 15th day of December,
2000, by THE GENESEE BREWING COMPANY, INC., a New York corporation ("GENESEE"),
in favor of BOSTON BREWING COMPANY, INC., D/B/A THE BOSTON BEER COMPANY, a
Massachusetts corporation, for itself and as the sole general partner of BOSTON
BEER COMPANY LIMITED PARTNERSHIP, a Massachusetts limited partnership
(collectively, "BOSTON BREWING").
R E C I T A L S :
WHEREAS, Genesee and Boston Brewing are parties to an Amended and
Restated Agreement dated as of April 30, 1997 (the "PRODUCTION AGREEMENT"),
under which Genesee has agreed to supply Boston Brewing, and Boston Brewing has
agreed to purchase from Genesee, on an as-ordered basis, Xxxxxx Xxxxx Boston
Lager and certain other Boston Brewing products;
WHEREAS, Genesee and Monroe Brewing Co., LLC ("MONROE BREWING") have
entered into an Asset Purchase Agreement dated of August 29, 2000, as amended by
Amendment No. 1 dated as of November ___, 2000 (collectively, the "PURCHASE
AGREEMENT"), pursuant to which Genesee has agreed to sell to Monroe, and Monroe
has agreed to purchase from Genesee, substantially all of the assets necessary
to operate Genesee's brewing business, including, but not limited to, all of
Genesee's right, title and interest in and to the Production Agreement; and
WHEREAS, at Genesee's request, Boston Brewing has consented to the
transfer of the Production Agreement from Genesee to Monroe Brewing pursuant to
a certain Consent dated December ___, 2000 (the "CONSENT"), which conditions the
effectiveness of consent on Genesee's execution and delivery to Boston Brewing
of a guaranty in favor of Boston Brewing substantially in the form hereof;
P R O V I S I O N S :
NOW, THEREFORE, in consideration of the Consent provided by Boston
Brewing and other good and valuable consideration, Genesee hereby agrees in
favor of Boston Brewing as follows:
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1. PERFORMANCE GUARANTY.
(a) Subject to the terms and conditions herein, Genesee hereby
guarantees the due, punctual and faithful performance by Monroe Brewing of its
obligations, duties, covenants and responsibilities under the Production
Agreement that arise after the closing under the Purchase Agreement based on
facts occurring subsequent thereto. Genesee hereby specifically further agrees
that in the event Monroe Brewing, for any reason, is obligated to perform under
the Production Agreement and it fails to do so in accordance with the terms
thereof, Genesee will, upon written notice from Boston Brewing, become liable to
Boston Brewing for any sum or sums Monroe Brewing has to pay Boston Brewing
under the terms of the Production Agreement for failure to perform or pay,
subject to the terms and conditions contained therein or any defenses thereto
which either Monroe Brewing may have or which Genesee may have.
(b) Notwithstanding anything herein to the contrary, Genesee's
obligations under this Guaranty and the Production Agreement shall terminate and
be of no further force or effect upon the expiration of 1,095 days after the
"Closing Date" (as defined in the Purchase Agreement) (the "TERMINATION DATE"),
provided that any claims made against Genesee hereunder prior to the Termination
Date and remaining unresolved or outstanding as of such date shall survive until
the earlier to occur of the payment or the final resolution and satisfaction of
such claims to the extent and subject to the terms and conditions herein. The
period between the Closing Date and the Termination Date is referred to herein
as the "GUARANTY PERIOD."
2. NET WORTH MAINTENANCE.
(a) So long as Genesee has any liability hereunder, Genesee
will maintain a Liquid Net Worth (defined for this purpose as the excess of (i)
unencumbered (1) cash and currency on hand and on deposit, demand deposits and
checks held, (2) short-term, highly liquid investments that are readily
convertible to known amounts of cash plus (3) marketable securities over (ii)
total liabilities, each as determined in accordance with generally accepted
accounting practices), in an amount that, in the aggregate, is not less than the
following:
First 365 days after Closing Date: $7,250,000
Second 365 days after Closing Date: $7,000,000
Third 365 days after Closing Date: $5,150,000
3. ENFORCEMENT / NOTICE.
(a) If Monroe Brewing fails to perform any of its duties under
the Production Agreement guaranteed hereby, then Boston Brewing may proceed
directly to make a claim against Genesee to be paid by Genesee without necessity
of any suit or proceeding by Boston Brewing against Monroe Brewing. Genesee
shall be entitled to assert any defenses or claims that Genesee or Monroe
Brewing may have under the Production Agreement or otherwise against any claim
made by Boston Brewing and does not otherwise waive any defenses whatsoever to
its obligations hereunder. Anytime, with or without consideration or notice,
Boston Brewing may waive enforcement of the terms, conditions
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and provisions of this Guaranty with respect to any breach or default by Monroe
Brewing, and such waiver will not diminish or otherwise affect Monroe Brewing's
obligations to Boston Brewing under the Production Agreement. Genesee agrees
that in the event any of the foregoing provisions are found to be unenforceable,
that portion so found will in no way affect the purpose and intent of the
remaining provisions, and to that extent those provisions will remain binding
upon the parties.
(b) Any claim, notice or other communication under this
Guaranty shall be in writing, and shall be deemed duly given when delivered
personally or by facsimile, or four days after being mailed by registered mail,
return receipt requested, or by documented over-night delivery to a party at the
following address (or such other address as such party may have specified by
notice given to the other party pursuant to this provision):
If to Genesee, to:
Xxxx X. Xxxxxx, Vice President
The Genesee Corporation
X.X. Xxx 000
Xxxxxxxxx, Xxx Xxxx 00000
with a copy to:
Monroe Brewing Co., LLC
000 Xx. Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx., President
If to Boston Brewing, to:
c/o The Boston Beer Company
00 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, President
4. SUBROGATION. Genesee shall be entitled to, and shall be fully
subrogated to all of Boston Brewing's rights under the Production Agreement with
respect to, and to the extent of, payments made by Genesee pursuant to this
Guaranty, and Boston Brewing hereby assigns any rights that may arise in
connection with such payment to enforce any remedy which Boston Brewing may have
against Monroe Brewing therefor.
5. AMENDMENTS AND MODIFICATION TO PRODUCTION AGREEMENT. As a condition
to Genesee's continuing liability hereunder, by its acceptance hereof, Boston
Brewing hereby acknowledges that Monroe Brewing has agreed with Genesee that, so
long as Genesee has any liability to Boston Brewing, it shall not agree to amend
or modify the
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Production Agreement, or to accept any funding, advances or other monies or
credit from Boston Brewing, in any manner that would in any way increase or
enlarge Genesee's duties, obligations or liabilities Boston Brewing without
Genesee's prior written consent. Accordingly, no such amendment or modification
shall be effective unless it is accompanied or preceded by Genesee's written
consent.
6. REPRESENTATIONS AND WARRANTIES.
(a) Genesee has the corporate power and authority and legal
right to execute and deliver this Guaranty, perform its obligations hereunder
and consummate the transactions herein contemplated. The execution and delivery
by Genesee of this Guaranty and the performance of its obligations and
consummation of the transactions contemplated hereunder have been duly
authorized by proper corporate proceedings, and this Guaranty constitutes the
legal, valid and binding obligation of Genesee, enforceable against Genesee in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws of general
applicability, and by the effect of general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
(b) The execution, delivery and performance by Genesee of this
Guaranty are within its corporate powers, have been duly authorized by all
necessary corporate action, do not contravene or violate (i) its Certificate of
Incorporation or By-Laws, (ii) any law, rule or regulation applicable to it, the
contravention or violation of which would or could reasonably be expected to
have a material adverse effect on Genesee's financial condition, (iii) any
restrictions under any material agreement, contract or instrument to which it is
a party or by which it or any of its property is bound, the contravention or
violation of which would or could reasonably be expected to have a material
adverse effect on Genesee's financial condition or (iv) any material order,
writ, judgment, award, injunction or decree binding on or affecting it or its
property, the contravention or violation of which would or could reasonably be
expected to have a material adverse effect on Genesee's financial condition, and
do not result in the creation or imposition of any adverse claim on the assets
of Genesee.
7. ASSIGNMENT.
(a) Notwithstanding anything herein to the contrary, Genesee
may assign this Guaranty to its parent corporation or any affiliate thereof,
provided that the assignee assumes all of Genesee's obligations hereunder,
including, but not limited to, those set forth in Section 2 hereof, and provided
that a copy of such assignment and assumption is delivered to Boston Brewing.
Upon such delivery, Genesee shall be relieved of any obligations hereunder.
(b) This Guaranty shall be for the sole benefit of Boston
Brewing and its parent corporation or any affiliate thereof and may not be
assigned by Boston Brewing other than as part of a corporate reorganization that
does not effect a change in control, within the meaning of Section 10(e) of the
Production Agreement, or enforced by anyone
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but Boston Brewing and its parent corporation or any affiliate thereof, provided
that no such assignment of this Guaranty to the parent corporation or any
affiliate of Boston Brewing shall be valid unless such parent corporation or
affiliate is also the assignee of the Production Agreement.
8. ENTIRE AGREEMENT; AMENDMENTS OR MODIFICATION. This Guaranty together
with the Production Agreement (as modified hereby) and the Consent constitute
the entire agreement between the parties regarding the subject matter hereof,
and Genesee shall have no other liabilities or obligations of any kind to Boston
Brewing with respect to the Production Agreement or otherwise, except as
expressly provided herein. This Guaranty may not be amended or modified except
with a writing executed by both parties.
9. GOVERNING LAW. This Guaranty, as well as all rights and obligations
of the parties hereto, shall be given, construed and interpreted according to
the internal laws of the State of New York.
IN WITNESS WHEREOF, Genesee has executed this Guaranty as of the date
first written above.
THE GENESEE BREWING COMPANY, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Vice President
ACCEPTED AND AGREED:
BOSTON BREWING COMPANY, INC. D/B/A
THE BOSTON BEER COMPANY, FOR ITSELF AND
AS THE SOLE GENERAL PARTNER OF BOSTON BEER
COMPANY LIMITED PARTNERSHIP
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President